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Savings v/s Investments: What Gets You Better Returns?

Savings v/s Investments: What Gets You Better Returns?
February 21, 2023


Savings and investments are frequently confused as being synonymous terms. One helps you accumulate funds for any short-term expenses or crises, while the other enables you to grow your money over time. In order to manage your money more effectively over the long and short term, as a financially savvy professional, you must integrate some proportion of both categories into your financial portfolio. To help you better plan your finances going forward, we will highlight the fundamental ideas of saving and investing, as well as their goals, risk factors, and eventual returns.

What Is Saving?

Whenever you accumulate a sum of money and park it in your bank accounts, or in the form of FDs or RDs, you're essentially saving it. Saving money typically means that it is available to you anytime you need it, with little to no risk of losing it. To begin with, you can simply consider a savings plan such as the HDFC Life Sanchay Plus plan which offers Guaranteed* Benefit Payouts along with life cover.


The purpose of saving money is to cater to your short-term expenses and emergencies. So, if you want to:

1. Plan a family vacation,

2. Fund short term educational expenses

3. Buy a new closet piece or new appliances,

4. Fund an unforeseen event, etc.

You must set a timeline and have a target amount in mind so that you’re able to save up for your wants and needs well in advance, take the money out without any additional fees, and fulfil your purpose.

What Is Investing?

Investing is the process of buying assets and holding them for the long term, which provides better returns over time in exchange for taking more risk. To invest wisely, you must understand the fundamentals and technicalities of investing in different asset classes (stocks, mutual funds, real estate, etc.) and analyse which would give you the maximum returns based on your risk tolerance, investment size, and goals.


Investing is a long-term game. Thus, keeping its volatility and liquidity in mind, you must aim to invest for relatively longer periods of time to get the maximum returns. Investing for the long term can help you:

1. Fund your child’s education,

2. Buy your dream home,

3. Plan your retirement,

4. Build long term wealth, etc

Investing is a viable way to use your money and possibly increase your fortune. The power of compounding and the risk-return trade-off are the main reasons investment has a higher growth potential.

Savings v/s Investment: Risk and Returns

1Degree of Risk -

Savings carry extremely little to no risk, so you will never have to worry about losing your money. However, investment markets are volatile. Thus, it’s crucial to understand the market and your risk tolerance before you start investing.

2Total Returns -

Saving your money in bank accounts and FDs do not provide higher returns in the future as they provide lower interest rates. However, investing your money in different asset classes can give you unexpectedly higher returns. The greater the risk, the higher the return.

3Influence of Inflation -

Savings may not help you beat inflation.  If you save a certain amount of money to cover your needs, the same amount of money will typically buy less in the future. As an alternative, investing offers a greater chance for your money to grow in line with inflation, depending on the investment product you choose.


Savings and investing both require a proportionate share of your financial portfolio. Both serve different purposes and enable you to have a smooth financial life. Thus, always learn about the different savings and investment products to choose the most suitable one for yourself and your loved ones.

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ARN: ED/01/23/31839

Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.

HDFC Life Sanchay Plus (UIN:101N134V16) is a non-participating, non-linked savings insurance plan. Life Insurance Coverage is available in this product. For more details on risk factors, associated terms and conditions and exclusions, please read sales brochure carefully before concluding a sale.